13 July 2025 | 8:24PM HKT Laopu Gold (6181.HK) Buy 1H25 preview: Reflect stronger sales offset by GPM pressure; 2H focus on SSSG resiliency, high tickets, and overseas | | | Laopu Gold is set to release its 1H25 results around late Aug with potential profit alert out in Jul (Jul 30 last year). We forecast its sales/net profit to grow at 268%/284% yoy to RMB12,963m/RMB2,259m, or a RMB2,409m adj net profit up 294% yoy if excluding RMB120m ESOP expenses. In addition, we highlight key assumptions on Focus into ...

Investment Rating - The report initiates coverage of Hengrui Pharma's H-shares and resumes coverage of A-shares, both with an Overweight (OW) rating, with H-shares being the preferred stock [1][43]. Core Insights - Hengrui Pharma is positioned to benefit from an improving domestic policy environment and accelerated globalization, which has not yet been fully reflected in the market [1]. - The company is recognized for its extensive and balanced product portfolio, with a strong pipeline across various therapeutic areas, including oncology, metabolic and cardiovascular diseases, immunology, and respiratory diseases [3][12]. - Hengrui is expected to receive approvals for 5, 5, and 11 new drugs in 2025, 2026, and 2027, respectively, totaling 47 NDA/BLA approvals from 2025 to 2027 [3][10]. Summary by Sections Market Potential - The global pharmaceutical market is valued at $1.47 trillion, approximately 6.6 times the size of the Chinese domestic market, with a projected CAGR of 5.7% from 2023 to 2028 [3][32]. - Hengrui has completed 14 licensing deals since 2018, with a total transaction value of $15 billion, indicating strong interest from global biopharma companies in assets from China [3][32]. Financial Projections - The target price for H-shares is HK$78, representing a 45% upside, while the target price for A-shares is RMB 71, representing a 37% upside [7][43]. - Revenue and net profit are projected to grow at CAGRs of 18% and 24%, respectively, from 2024 to 2027 [4][37]. - Innovative drug sales are expected to grow at a CAGR of 34% from 2024 to 2027, contributing to 74% of total drug sales by 2027 [38][40]. Product Pipeline - Hengrui has developed a comprehensive pipeline of innovative drugs, with a focus on key disease areas and a one-stop solution for various subtypes and treatment needs [19][21]. - The company is advancing multiple GLP-1 products targeting the $100 billion global diabetes market, with competitive clinical data supporting their efficacy [19][20]. Valuation Analysis - The DCF valuation method yields a target price of HK$78 for H-shares and RMB 71 for A-shares, with a reasonable premium due to Hengrui's leading position and growth potential [4][43]. - The SOTP analysis indicates that the contribution of globalization opportunities to total value is still conservative, accounting for only 13% of the total estimated value [4][43].

Investment Rating - The report maintains a "Buy" rating for CATL A/H shares with a 12-month price target of Rmb 323.00 for A-shares and HK$ 411.00 for H-shares, indicating an upside of 19.3% and 6.8% respectively [8][15]. Core Insights - The report highlights three key focuses for CATL: unit gross profit (GP) expansion, upward trend in capital expenditures (CAPEX), and progress in the US market which may enhance the total addressable market (TAM) [15][16]. Summary by Sections Earnings Preview - CATL is expected to report revenue of Rmb 104.7 billion and net profit of Rmb 15.6 billion in 2Q25, with unit GP anticipated to increase to Rmb 150/kWh from Rmb 147/kWh in 1Q25, driven by strong overseas shipments [1][41]. Unit GP Expansion - The blended battery unit GP is projected to expand due to improved product mix, with overseas EV sales in Europe showing a 28% year-over-year growth in the first five months of 2025 [1][19]. CATL is estimated to account for about 70% of Europe's battery imports from China [1][20]. CAPEX Trends - The report revises up CAPEX forecasts for 2025-2027 by 25%-5%, expecting CATL's relative CAPEX share to rise from approximately 13% in 2024 to around 24% in 2025, which is expected to drive market share gains [16][30]. US Market Progress - Recent developments regarding Ford's Michigan LFP battery factory, which utilizes CATL's technology, suggest improved market access for CATL in the US, potentially increasing its TAM [16][19]. Financial Projections - Revenue projections for CATL are set at Rmb 362 billion for 2024, Rmb 436 billion for 2025, and Rmb 532 billion for 2026, with EBITDA expected to grow significantly over the same period [3][13]. EPS is forecasted to increase from Rmb 11.58 in 2024 to Rmb 22.45 by 2027 [3][13]. Market Position - CATL's market capitalization is noted at Rmb 1.2 trillion, with a strong enterprise value of Rmb 972.5 billion, indicating robust financial health and market positioning within the battery industry [3][5].

7 July 2025 | 10:31AM HKT GC Tech: Time Interconnect (1729.HK): High-speed cable and Servers ODM; China Cloud Capex to drive growth ahead We talked to Time Interconnect (1729.HK, Not Covered) management recently. Time Interconnect provides customized copper and optical fiber cable, along with servers ODM. Overall, management remains positive on the company's revenue growth in 2025E driven by (1) rising AI demand to drive adoption of high-speed cable products, where the company benefits from offering compreh ...

7 July 2025 | 3:27PM HKT Hua Hong (1347.HK): Mgmt. Call: Full UT rate to support pricing trend; GM improvements ahead despite D&A burdens; Neutral We hosted Hua Hong management on July 7 in our China Semis Corp Call series (July 7 - 10). Key discussions were around pricing strategies, UT rates, the company's capacity expansion plans and outlook on margin levels. Overall, Hua Hong remains positive on their operations, with UT rates of its major fabs at 100% or above, supported by a strong demand across power ...

Investment Ratings - PetroChina: Buy with a 12-month target price of HK$8.30/Rmb12.60, reflecting a potential upside of 21.5% [19][24] - CNOOC: Buy with a 12-month target price of HK$20.90, indicating a potential upside of 14.6% [26][29] - Sinopec: Neutral with a 12-month target price of HK$3.70/Rmb4.90, suggesting a downside of 11.7% [30][35] Core Insights - The report emphasizes a preference for free cash flow (FCF) leaders like PetroChina and CNOOC, both expected to achieve double-digit FCF yields in 2026E [2][19] - PetroChina and CNOOC are projected to achieve FCF breakeven at Brent oil prices of US$30-$40/bbl, with attractive FCF yields of approximately 11% for both companies under various oil price scenarios [21][17] - Sinopec is expected to face weak FCF due to prolonged chemical market surplus and elevated capital expenditures, leading to a Neutral rating [30][39] Summary by Sections Earnings Estimates - PetroChina's estimated net income for 2Q is projected to decline by 30% year-on-year, while Sinopec's is expected to drop by 46% [1] - CNOOC's 1H net income is estimated to decrease by 16% year-on-year [1] Valuation Comparisons - PetroChina and CNOOC are trading at discounted valuations of 3.1X-3.2X on 2026 EV/DACF compared to a global average of 5.5X [2][14] - The report highlights that both companies could maintain attractive FCF yields even at lower oil prices, with PetroChina and CNOOC achieving yields of approximately 10% and 9% respectively at US$60/bbl [2][18] Price Sensitivity Analysis - For PetroChina, total EBITDA is projected to range from Rmb351.6 million at US$50/bbl to Rmb542.5 million at US$90/bbl [20] - CNOOC's EBITDA is expected to range from Rmb176.2 million at US$50/bbl to Rmb308.0 million at US$90/bbl [28] Market Dynamics - Recent geopolitical events have supported oil prices, leading to low domestic oil product inventories and robust refining margins despite weak demand [1][2] - The report notes that deep utilization cuts among state-owned refiners have contributed to the current market conditions [2][8]

7 July 2025 | 9:02AM HKT GC Tech: Lens Tech (300433.SZ): Mgmt. Call takeaways: Foldable phones bring new opportunities; Vehicle glass drives diversification We talked to Lens Tech (300433.SZ, Not Covered) management recently. Management remains positive on foldable phones end market demand on the back of differentiation, new use cases, and technology getting more ready to bring solid user experience to end consumers. Foldable phones would also drive the company's opportunities in components, from glass cove ...

30% 40% 50% Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Jan-25 Apr-25 SNE data Battery Alliance data 41.8% 42.1% CATL's domestic ePV battery market share Source: SNE, CPCA, Battery Alliance, Morgan Stanley Research Morgan Stanley Asia Limited+ Jack Lu Equity Analyst Jack.Lu@morganstanley.com +852 2848-5044 July 4, 2025 06:19 AM GMT M Update Contemporary Amperex Technology Co. Ltd. | Asia Pacific CATL Losing Share in China? Not Really Key Takeaways Exhibit 1: Battery Alliance data shows that CATL ...

GC Tech: Conant Optical (2276.HK): AI / AR glasses customized lenses with lightness; new capacity expansion to capture growing demand We met Conant Optical's (2276.HK, Not Covered) management in Hong Kong recently. Conant Optical is a leading China resin lenses manufacturer, and is expanding its business from the spectacle lens market to AI / AR glasses to capture a larger addressable market. Overall, management expects to see sustained growth in the company's existing core business, and is positive on the ...

更多资料加入知识星球：水木调研纪要 关注公众号：水木Alpha 29 June 2025 | 3:25PM HKT China Resources Pharmaceuticals (3320.HK): China Healthcare Corporate Day 2025 — Key Takeaways: Soft growth in 1H amid Presenter: Yulin Chen - Head of Investor Relations Bottom line: Management noted soft growth in 1H due to challenging industry environment and toned down previous guidance of double-digit y/y sales growth for 2025 pending recovery situation in 2H. Cash collection remained under pressure. Key Takeaways Soft growth in 1H: management to ...